Though overshadowed now by the Mulroney-Schreiber affair, the Liberals are still trying to convince Canadians that the Conservatives entered into some sort of shady money laundering scheme to evade election spending limits:

The Liberal Opposition has written to the Commissioner of Canada Elections requesting that he look into an additional nine campaigns that may have participated in the Conservatives’ apparent scheme to violate election spending limits, Liberal MP Dominic LeBlanc said today.

“The list of people implicated in this “in and out” scheme appears to be growing longer with each passing day,” said Mr. LeBlanc. “If Prime Minister Stephen Harper will not come clean about how deep this scandal goes in the Conservative Party, then we are calling on Elections Canada to get to the bottom of it.”

The Conservative Party is currently under investigation by Elections Canada for allegedly funnelling over $1.2 million in national advertising costs to regional candidates during the 2006 federal election in order to circumvent federal election spending limits.

Indeed, the language got so harsh and the accusations so vicious that the Conservatives felt compelled to file an intent to pursue a libel action against the Liberals.

The Conservatives insist that:

1. That no laws were broken.
2. The Opposition parties are hypocrites for condemning exactly the sort of thing every party does, and that is move money back and forth to pay for advertising declared on local candidates' returns with a careful eye on getting as close to the spending limits as possible while getting a rebate back from Elections Canada

That second point intrigued me. I personally found it easy to believe all parties did this sort of thing, that is, buy advertising created by party headquarters using money transfered to the local riding from party headquarters, often advertising designed to run in multiple ridings simultaneously. I also found it easy to believe that the advertising purchased was not particularly local in content, given the fact that this was a federal election being fought, especially in the case of a combined riding effort.

In other words, I didn't think the Conservatives did anything wrong, and I don't believe the other parties did either.

But what about the suggestion that all parties do this sort of thing? Here I'll highlight some interesting examples of Liberal and NDP ad buys that, to me at least, look a lot like what the Conservatives did.

All the papers, emails, faxes, and cancelled cheques are in PDF form.

First example is out west, in Calgary. It dates back to the 2004 campaign that saw Paul Martin reduced to a minority government. There is a letter from to the Official Agent of the Ken Nicol Campaign from Sheamus Murphy, the Director General of the federal Liberal Party of Canada (Alberta wing), and the "local" advertising.

Go over the letter and the advertising associated with it for yourself.

In it, Murphy tells Bruce Milne that "[d]uring the past election, the Liberal Party of Canada in Alberta transferred funds...directly to the candidate [that] need to be accounted for in your Candidate's Electoral Campaign Return."

The transfer was "$280.74 for Southern Alberta candidates ad placed in the Calgary Herald".

Study the ad from the Calgary Herald. No less than 14 individual MPs are listed on the ad. And yet the $280.74 is going to be reported on the individual candidates' returns? How local can the advertising be if it is shared across 14 candidates? An ad focusing on issues concerning people in southern Alberta maybe? The ad doesn't even mention Alberta, southern portion or otherwise:

Paul Martin and your Liberal Candidates will provide national leadership to secure universal public health care and invest in our communities.

On Monday, June 28th, choose your leadership and support your local Liberal Candidate.

Authorized by the Official Agent of the Liberal Party of Canada.

They didn't even put "Alberta" in parentheses beside "Liberal Party of Canada".

Sure looks like a national ad with generic non-regional content that has a block of space in which local candidates' names and faces can be plugged in. The ad was funded by Liberal Party headquarters, transfering a share of the total ad spend to the each of the local candidates who appear in the ad, who then claim the money as local candidate spending, eligible for a rebate.

Isn't that what the Conservatives are being accused of doing?

It is also strange the way the letter is worded. It almost sounds like Liberal HQ bought and paid for the ad without mentioning it to the local candidate, and that his riding association is now being told they have to cut a cheque and do some paperwork in order to "locallize" the ad spend.

Want to see something amusing? Same election (38th election on June 28, 2004), but let's focus on northern Alberta. This time it's a letter from Sheamus Murphy to the Official Agent of Doug Faulkner.

Guess what? Now Faulkner is going to report his share of an ad buy totalling $306.64, money that was transfered to him from Liberal HQ. And the "local" advertising that was purchased is exactly the same ad that was run in southern Alberta. The only thing different was the list of local candidates and their pictures. Otherwise yet another national ad with absolutely no mention in the main content of ridings or even the province in which the ad was being run, funded by Liberal headquarters, claimed by the local candidates after the funds were transfered, and localized merely by putting the candidates name on it.

Sit back, I'm not done yet.

Move forward to the 39th general election that saw Stephen Harper and Conservatives win. This is the election that is the focus of the Liberal attacks with regards to the ad spending.

I have here a fax from Wade Flowers, the Director of Organization for the New Brunswick Liberal Association, to Clifford Lavigne, the riding association president for Moncton--Riverview--Dieppe.

Four days before the vote, Flowers informs Lavigne that 10 ridings in New Brunswick would be combining to run an ad two days before the vote, and that each riding would pay $386 as their contribution. The fax is not explicit about whether the Liberal Party national headquarters would be transfering the money, but then why would the centre even be involved and talking about splitting costs unless it was centrally paid for. The ad itself, also attached, is certainly not very local. It lists four national issues and contrasts the Liberal and Conservative positions. It encourages the reader to vote for the "local" candidate. Then, at the bottom, outside of the main (and geographically neutral) content, are the names of ten New Brunswick candidates.

What about the NDP? Are all the parties doing this sort of thing?

You betcha.

Staying with the last election, head back to the west coast and study this documentation from the Libby Davies campaign. In it we have a cheque from the campaign office to the national level of the NDP for a whopping $2,612 dollars for radio advertising containing "ethnic tags", accompanied with the invoice from NDP national headquarters for the money.

Ethnic tags? Sounds a bit insensitive, but actually they talk about English tags and French tags -- it's all advert-speak.

Here is the script of the radio ad:

After years of broken promises and corruption, the Liberals just don't deserve your vote.

Enough is enough -- people work hard to pay their taxes.

Jack Layton and the NDP will work so that we get the services we pay for. Fighting crime. Health care when we need it. Affordable education for young people. Long-term care for seniors.

We'll make Ottawa accountable for you.

In Vancouver East, Re-elect Libby Davies.

That counts for local advertising? One line at the end of a script that could otherwise be read out in Halifax and still make sense? See, by putting the mention of the local candidate at the end, there is no difficulty is re-editing the audio for any candidate you want.

In any case, the email the follows is very interesting. The federal NDP bookkeeper is writing to the official agent of Libby Davies' campaign:

We are told by communications folks in BC that these were radio ads with the Candidate's personal tag on the end - therefore a local expense to be reported under the Candidate's expense ceiling, regardless of who pays.

So that's what makes advertising local -- the existence of the candidate's name at the end. Well, that makes it simple and clears up a lot of doubt. Hey, isn't that what the Conservatives have been saying all this time?

It also looks like the NDP was worried about skirting close to the limits. The Official Agent for the riding got in touch with the national NDP representative about this when the federal NDP sent an invoice for the radio ad to the riding association:

This invoice is not ours....Please check because this is really really bad for our ceiling...

So let's get this clear. The NDP folks at the national level run radio ads with national non-local content except for the name of the candidate mentioned at the end. They then send an invoice for that "local" ad to the riding association demanding payment, and the local riding association says they can't pay it because it would exceed their legal spending limits.

The national level people say they have to pay up, because without the invoice the NDP won't get the rebate, but not to be too concerned about the spending limits:

For rebate purposes, we were asked to to bill each campaign - in the case of VanEast, $2,612.00.

The good news is that the Federal Party will transfer $2,600 to the Federal Riding Association as we agreed to pay for the ads.

We hope that you are able to squeeze this in under the ceiling. Some expenses are not considered election expenses subject to limits, such as fundraising costs. Please look at the totals and get back to us if you think you have a problem.

I don't know if any problems were found, but the riding association did cut the cheque for the federal NDP, which was covered by the transfer promised in that email.

Money goes in. Money comes out. National ads that mention the candidates name are charged as local expenses. Spending limits are skirted. The whole effort is run from the centre with participation of the the local ridings limited to filing the appropriate paperwork.

Sounds strangely familiar.

Another example? Got lots. How about another NDP effort in the last election, also in British Columbia. This time, we have a "local" advertising campaign that is initiated from the federal NDP level. In the first two emails, Ryan Stewart who is a federal NDP organizer in BC proposes the idea of a shared ad buy to four candidates, and then announces 100% participation in the effort.

In the third email, the local ridings are told they'll be charged $3,738, and that the federal NDP will kick in $2,000 each. The split is determined "for budget and ceiling purposes".

The paper trail continues, showing the money moving back and forth, all perfectly legal, and finally declared on the local candidates' returns, earning them rebates from Elections Canada.

I know this is starting to seem dry and repetitive, but the next one is really interesting. It shows how you can use ethnic demographics to slip under the election spending limits.

Olivia Chow is the NDP MP for Trinity-Spadina in Toronto. In the last election, the federal NDP people went through some clever math to indicate just how much of an ad campaign needed to be paid for by Olivia Chow's riding association, in order to avoid hitting spending limits. It amounts to a headcount of Chinese people.

The calculation was delivered by a federal organizer, Jess Turk-Browne, to Edward McDonnell, the local representative:

If the ad runs on OMNI.1 (CFMT) it will reach 90% of viewers in the province of Ontario and is available to viewers across Canada via cable systems served by ExpressVu satellite distribution systems and in the province of Quebec, via Star Choice and Look TV.

Accordingly 90% of the Ontario population is 481 510 = 433,354.5.

The Trinity-Spadina campaign's target viewers are 18,900 out of all the potential Chinese OMNI1 viewers in Ontario could be reasonably considered as the candidate's target. Chinese viewers in Trinity Spadina = 3.925% of Chinese viewers in Ontario.

The total cost of the production of the ad is $9,309 and the cost of placement is $22,709 = $32,018.

3.925% of the cost should come under the local ceiling - $1256.71 and the rest is a central expense.

I have to admit, I was somewhat taken back by this one. Counting the number of people who are of Chinese extraction who are thought to watch this TV station in order to justify the 3.925% allocation of an ad buy to the local riding seems...well...unseemly.

I don't think the Liberals ever accused the Conservatives of this sort of thing.

Interestingly, the $1,256.71 share is listed on Oliva Chow's return as "Provincial Chinese Campaign TV Ad", not even attempting to argue that the ad as a whole is local at all. Just that 3.925% of the ad is local.

I guess Olivia Chow gets the Elections Canada rebate for the 3.925% portion of the cost of this provincial ad campaign her riding association was allocated on the basis of the Chinese headcount of TV viewers.

I still shake my head at this one. Actually, I'm not even sure that Olivia Chow makes an appearance in the ad. Is the argument that because there are people of Chinese extraction in her riding who might watch this station, a portion of the provincially-run Chinese ad is immediately considered local? Weird.

Update: Maybe I need to look at this the other way around. The ad targets Trinity Spadina but is expensive and breaks the ceiling. So the NDP makes the argument that CFMT broadcasts across Ontario, so that dilutes the amount that the Trinity Spadina riding association needs to actually claim. To make sure the dilution is sufficient to avoid breaking the spending limit, the NDP doesn't count all the voters in Trinity Spadina who potentially watch CFMT, but only the Chinese speakers who might watch. Very creative.

So there you have it...for now. Example after example of the Liberal Party and the NDP moving money around to pay for ads that are "localized" solely by the inclusion of the candidates name at the end or off to the side. Indeed, the same ad being re-used in different areas, just with different names. The cheques are cut by the local riding associations and accounted for on their returns in order to qualify for the Elections Canada rebate, but the funding and organization comes out of the national headquarters. And the numbers are carefully (and in that last example, perhaps absurdly) adjusted in order to come in just under the mandated local spending limits.

So which is it? Clever application of the rules, or widespread cheating? Or maybe you just think it's cheating when the Conservatives do it. The Liberals seem to think that's the case.

Note: Comments are on now that Intense Debate has sorted out the issue. Those guys are fast! If you run a blog, check out their comment system.

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